Diversity Management: Training Exposes Execs' Hidden Biases

Diversity management and awareness for increased cultural competence in the workplace have led Toyota Financial Services’ employees to be more sensitive in the communityand that has increased their business, saysGeorge Borst, former President and CEO.

In this hard-hitting interview on diversity management with DiversityInc CEO Luke Visconti, Borst discussed the strong emphasis on training, mentoring and succession planning and the results they are having. He also emphasized TFS’ community involvement and efforts to implement equity in credit ratings. Toyota is No. 41 in the 2012 DiversityInc Top 50.

Borst explained how TFS employs a three-phase program rooted in diversity awareness. All 3,300 associates receive foundational training, and managers receive cultural fluency training, to help highlight individuals’ diversity blind spots and erase the underlying nuances of discrimination. It’s a 360-style approach to diversity management that’s allowed TFS to increase its representation and engagement of people from underrepresented groups.

For more on the importance of diversity training, read Do White Men Really Need Diversity OutreachWatch ourtalent development web seminarforbest practices from The Coca-Cola Company and CSX Corporation onincreasing talent and employee engagement.

A Supplement for Business Success

Luke Visconti: Why is diversity so important to Toyota Financial Services

George Borst: Our business, our work force has to mirror the people that we sell to and the people that we work with. I would love to take credit for it myself but I have a great expression: If you have two people in the room that think the same way, you now have one too many in there.

That is a very powerful thing. If everybody on the management committee thought the same way I did, it would be easy but as ineffective as it could be. This forces us to look at things in more creative, more innovative, ways.

Luke Visconti: Would you say that you are using race and gender as a proxy for diversity and thought

George Borst: No. Diverse opinion does not rely on whether somebody is gay or Spanish or a woman. You get people that think differently.

We are a Southern Californiabased firm. People may look at us and say, “We are a blue state [TFS is in California] so we think differently and make these policies.” There are a lot of people that think differently.

I think race and gender get you different points of view quicker but there are also a lot of different points of view there. I wouldn’t say we use it quite as a proxy but as a supplement.

In the diversity and inclusion area over the last couple of years, we have launched a three-phase program where we had awareness training for all of our 3,300 associates. We had a second phase called “Small Acts of Inclusion” that talked about nuances of discrimination and how you make people feel more part of the group.

We are just launching what we call the third-phase, “Generational Workplace.” People in their 60s look at people working in their 20s and may view them differently. Everybody has different points of view on work/life balance, so we are trying to make people understand how they work together.

Building the Bench

George Borst: That leads us to the second phaseour talent-review system. We are a management committee group of 10 people and we meet a couple of times a year to talk about the work force. We have one seven-hour meeting on succession planning.

Prior to the meeting, everyone rates the national managers, corporate managers, nonmanagement vice presidents, and management committee vice presidents by strengths, weaknesses, readiness, et cetera. We determine whether they have areas to work on, what else they need, what they do well, et cetera. [Hear Borst speak in detailabout their leadership selection process by clicking the player below.]

We then post the top 35 jobs in the company that are the next layer under the management committee and we select the top three candidates in the succession plan.

We then look at each one from a diversity point of view. We say, “How do we look on diversity” For example, if we find out that we have three white men that are 45 years old, we go through the whole thing and adjust for a diverse slate of candidates.

When we put somebody in there, we say, “To be successful in this job, what do they need to do” We assign them a management committee mentor who is not in their direct line of command. We talk about extra training or cross-organizational projects that they can get on to get more exposure.

We have been doing this four or five years now. It has really led to a much more diverse population for us. There are 10 people on our management committee: 40 percent are women or people of color; the next level down today is now 36 percent women or people of color. Our field national managers now are 21 percent people of color or women and the level underneath them is 34 percent.

We really are trying to build the bench but not only build the bench. It’s one thing to show somebody’s name out there, but if you don’t give them the support to be successfulmentoring, the extra training, et ceterait really goes away.

We have two internal programs: Advanced Leadership Development and Executive Leadership Development. We have these annually over the last three years. Sixty-eight percent of the people that have gone through the Advanced Leadership Development program are women or people of color; 60 percent of our women or people of color have gone to the Executive Leadership Development program.

We have a much more ready bench. That has helped the organization start to think differently about how we interact with our customers, our dealers and the people that may need help, both in buying a car and socially in the market.

The Danger of Homogeny

Luke Visconti: From the perspective of being a leader of a large organization, why do you think there ends up being a homogeneous selection What’s the danger of that

George Borst: I think it’s a legacy carryover. If you go back 20 years ago, the aha moments on what diversity and inclusion bring to an organization were not there. You are dealing with an experienced population who are now in key middle-management jobs that are disproportionately white males. [Click on the player below to hear Borst discuss the need for diversity in the workplace.]

In the last 10 years, people have gotten more enlightened and realized the diverse population they sell to. They have started to realize that you can make a lot of mistakes if you don’t have people thinking differently and, more importantly, creating the environment where they feel safe to challenge and attack things differently.

What you have to do is accelerate good, smart people that maybe haven’t had many opportunities but certainly have the EQ and the IQ to succeed if given the right support. You need to accelerate that to give a more level playing field that mirrors the population.

During Black History Month, I went to three of our African American Collective’s (AAC), a business partnering group, lunches and one of their evening events. I went to learn something.

We had a consultant at one of these meetingshe was an African-American. He was talking about the nuanced discrimination in the work force with women and he was talking about how a promotion opportunity comes up.

In his example, he said, “If there isn’t an immediate qualified candidate, the companyhas to take a risk. They may look at a white male candidate and say, “Let’s give him a chance.” In the same breath, they may say to a female candidate, “Why don’t we give her a project”

It reinforces the nuanced discrimination. The sad part is that the person saying those things is being diverse in their thinking. They wanted to give this person a project to see what they can do, whereas they were going to give a white male a shot without having to prove himself on a project.

That got a reaction from the audience. That makes somebody like me take notice that we need to be careful. It also reinforces what we are trying to do in this talent-review session and give those people the right support, take the right risk.

Mentoring Improves Morale

We do our associate opinion survey and we added a couple of years ago two questions:

* Have you been formally or informally mentored in the last 12 months It was about 42 percent. We segregated the people that said they were mentored: their morale was 20 points higher than the general population.

* The second question that we monitored against them was whether they had an opportunity to grow and developthey were 22 percent higher than the population.

We formalized a mentoring program in the last year. It’s called RPTM (Realizing Potential Through Mentoring). We had a training programtrained mentors and mentees. Sixty-one percent of the 92 people selected were women or people of color. We could start to move the ball theretrying to build a groundswell, a nucleus of a work force that does think differently, feels comfortableand it’s being appropriately recognized.

The most dangerous people are those that think they are open-minded and non-discriminatory. They have this nuanced discrimination that they are blind to.

That’s why we gave our executives cultural-fluency training: it puts you on a scale from zero to 140 how open-minded you are in acceptance of other groups, of other points of view. Nobody saw anybody else’s individual score. We had a coaching session and a training session, so hopefully they have alerted some people to their blind spots.

Luke Visconti: How long have you been doing that

George Borst: We just started. It was the first one we did and we are really excited about it. It was a lot of fun and showed where the group scored and where you scored versus the group.

That’s one of the things everybody kept close to the chestyou were shocked that you could have been seen as a bigot. People probably had a lot of “aha” moments that I don’t think a lot of people shared.

Partnering Around Differences

George Borst: We talk about the importance of Toyota’s business partnering groupson campus and the support they get from the executives. I go to a lot of the business partnering groups. I enjoy going to those things because I meet a lot of different people and I always learn something from that.

But here is the thing that always startles me: I get a 150 percent recognition because the people there are so happy that somebody is there supporting their cause and they really appreciated when a member of senior management attends.

I have shared this over the last couple of years with my key direct reports and now a certain amount of their bonus is derived from diversity and inclusion activities and I will tell you the beauty of thatmy direct reports started showing up and the people that work for them started realizing this is important. People now going down two and three and four levels are coming to these meetings and people thought they had to be from an underrepresented group to go.

Helping Consumers With Credit

Congresswoman Maxine Waters had come to our campus in California, and if she wins in November, she will be our district representative, our congresswoman from Torrance.

I pulled together some numbers: the focus was how we help people that are less fortunate than us. I started by telling her that Toyota Financial Services, when we approve somebody for credit, we are blind of whether they are African American, Hispanic or whatever.

What we are proud of in the financing of new autos is that TFS is number one in lending money to the African-American community and number one in lending to the Hispanic community.

The biggest issue facing the country over the last three to four years is the blowup in the housing market. There are a lot of very good people of all races that got hurt in the housing crisis and the depreciation of the housing market just put them upside down.

In evaluating somebody’s credit, if they have 120 days behind on the mortgage and they haven’t been foreclosed on, and the rest of their credit is good, we will approve them. Our view is that these people are not credit criminals; they are good people that ran into hard times. They have managed to pay their other bills. You know you should try to help people that have a good credit history except for foreclosure because you need a car to get to work.

We try to do that to help the community, and I think that has really improved things. We have been doing this for a couple of years and are very satisfied with where it is.

Active Community Outreach

We are not good at being a “checkbook-charity” organization. We like to be very active in our involvement.

About six years ago, we decided we wanted to do charity work in a big way. We wanted to identify with an organization where our associates could be active and where it would not be self-serving. We picked the Boys and Girls Club of East Los Angeles. It’s in the middle of gang territorya very tough part of town.

When you fast-forward five years, we have offered to just the Boys and Girls Club of East LA 200 partial scholarships to go to college. There is a national Boys and Girls Club weekit’s usually in Apriland last year there was an event every day. We have 700 people here on campus; we had 140 people volunteer. Some of the events were on campus. We bused the kids in.

We since upgraded our involvement with Boys and Girls Club.In cities where our associates live and work, especially Baltimore, Cedar Rapids and Phoenix where we have customerservice centers with as many as 500 associates, we are deeply involved with the local clubs.

We now have a more formal program called Diplomas to Degrees with a national Boys and Girls Club that we just launched in the last year. About 41 percent of what we do in philanthropy goes to diverse organizations.

— Luke Visconti

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